Don’t be scared of GRI Standards
TPB Sustainability Advisors Carissa Pobre and Vicky Lee share how companies are getting ready for the new standards to measure their sustainability performance.
What’s new always brings a level of both excitement and anxiety. Depending on where one is on their sustainability journey, the proportion between them may be equal or lopsided. As the Global Reporting Initiative Standards (GRI Standards) come into force in July 2018, we wave goodbye to its numbered earlier editions – from the first iteration back in 2000 up to the most recent G4 guidelines.
Whether companies find themselves in a humble transition from G4, or are about to report for the first time and use the standards as their blueprint, the essence of standard sustainability reporting is not only urgent, but in demand. That gives more reason for us not to be scared of it, and to welcome this change prepared.
Sustainability disclosures in demand
GRI Standards comes at a time when non-financial disclosure is in such high demand. As investors, stock markets and more expect greater transparency on critical sustainability issues, reporting frameworks like the GRI Standards encourage more ownership among companies over environmental and social risks, and ultimately help inform decisions.
These include the decisions that investors increasingly use ESG data for – research jointly undertaken by GRI and RobecoSAM, the sustainable investing company that also handles benchmarking of the Dow Jones Sustainability Indices, reinforces how the GRI Standards provides information that investors want to know, and are well-placed to form the basis of sustainability-related disclosure.
Better structure for better quality reporting
We do not have to be scared of using the GRI Standards. Under the new and improved, smaller improvements on the formatting and structure make a big difference in navigating GRI’s requirements, and the principles that have long underpinned the framework – particularly materiality and sustainability context – are made clearer so that the GRI Standards truly empower reporters.
For one thing, between clarity and modularity is a stroke of genius. The modular structure of the GRI Standards provides the certainty that we are meant to use, rather than be used by the framework. Reporting organisations can take advantage of both how disclosure requirements are clarified, and how the set of standards are made to be flexible to complement one’s reporting practice.
Now with three universal standards (GRI 101-103), reporters will be able to set out ‘how’ and ‘what’ to write meaningfully in a more systematic manner. GRI 101 Foundation gives an overview of how GRI Standards should be used, and explains various reporting principles to help reports define contents in their reports. With contextual information set in 102 General Disclosure, 103 Management Approach is another highlight of the new GRI standards, as it gives guidance for reporters to report the management approach for each material topic as well as topic-specific Standards (series 200, 300 and 400).
With your report built in this structure, readers will be able to see critical information on what your business is like and the impact you contribute. Such information is now more structurally presented, which makes your report more accessible and easier for readers to understand.
Materiality is meant to make business sense
As reporting frameworks also become more sophisticated, materiality – defined as reflecting an organisation’s significant economic, environmental and social impacts, or substantively influencing the assessments and decisions of stakeholders – is one of the principles that the GRI Standards have further emphasised. This is because the focus on materiality gets our eyes on the prize: when we disclose information that is relevant and critical, we are encouraged to have more ownership and responsibility over material issues.
At The Purpose Business, we find that our clients benefit when they are laser-focused on materiality. A principle that ultimately goes beyond a reporting requirement, robust materiality is often an indication that we are thinking about how data can inform strategic decisions, thus bringing us closer to understanding material impacts that shape long-term strategy. GRI Standards have in fact made several clarifications that materiality is meant to address key sustainability issues from a holistic business perspective.
For example, the Philippine food and beverage company Universal Robina Corporation (URC) conducted a comprehensive materiality assessment for overall strategy development. This consequently enriches URC’s future reporting, and importantly puts forward a purposeful sustainability strategy that comprises the impacts, risks and opportunities that are business-critical. Another example is Swire Properties, one of the largest property developers, have launched the SD 2030 Strategy and defined five strategic pillars by putting consideration the results of the materiality assessment. Under this new strategy, the new sustainable development management structure has come into play to ensure a full integration of strategy across its operations.
Demonstrate your commitment to responsible growth
As GRI has always been a trailblazer, with the new Standards, we are brought closer to the very purpose of sustainability reporting – that is, to demonstrate our commitment to responsible growth. GRI Standards are designed so that companies consider the wider context of sustainability, using the lens that looks at significant impacts on the economy, environment and society. When companies truly own these issues, through reporting, they are able to tell their story to enable responsible growth. Sustainability context, one of the reporting principles for defining content, is particularly useful in terms of demonstrating one’s contributions.
By prompting companies to look at the big picture, whether that be global trends or international industry initiatives, or the relationship between key sustainability issues and organisational strategy, GRI encourages that we work toward both common good and common growth. Providing both the microscope to focus on important issues and telescope to see the full picture, GRI Standards reporting is a systematic approach that companies, and their report audiences, can welcome.
The Purpose Business can help you wherever your business is on its sustainability journey, including sustainability strategy, materiality, reporting and communications. We won’t make it scary! Contact us to arrange an informal chat and sign up to get our latest insights on sustainable business in Asia.
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